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1 Syddansk Universitet Coherent Energy and Environmental System Analysis Lund, Henrik; Hvelplund, Frede; Vad Mathiesen, Brian; Alberg Østergaard, Poul; Christensen, Per; Connolly, David; Schaltz, Erik; R. Pillay, Jayakrishnan; Pagh Nielsen, Mads; Felby, Claus; Scott Bentsen, Niclas; Tonini, Davide; Astrup, Thomas; Meyer, Niels Ivan; Heussen, Kai; Morthorst, Poul Erik; Møller Andersen, Frits; Münster, Marie; Pade Hansen, Lise-Lotte; Wenzel, Henrik; Hamelin, Lorie ; Munksgaard, Jesper; Karnøe, Peter; Lind, Morten Publication date: 2011 Document Version Publisher final version (usually the publisher pdf) Link to publication Citation for pulished version (APA): Lund, H., Hvelplund, F., Vad Mathiesen, B., Alberg Østergaard, P., Christensen, P., Connolly, D.,... Lind, M. (2011). Coherent Energy and Environmental System Analysis. Department of Development and Planning, Aalborg University. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. Users may download and print one copy of any publication from the public portal for the purpose of private study or research. You may not further distribute the material or use it for any profit-making activity or commercial gain You may freely distribute the URL identifying the publication in the public portal? Take down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. Download date: 03. Sep. 2015

5 Foreword This report presents a summary of results of the strategic research project Coherent Energy and Environmental System Analysis (CEESA) which was conducted in the period and funded by the Danish Strategic Research Council together with the participating parties. The project was interdisciplinary and involved more than 20 researchers from 7 different university departments or research institutions in Denmark. Moreover, the project was supported by an international advisory panel. The results include further development and integration of existing tools and methodologies into coherent energy and environmental analysis tools as well as analyses of the design and implementation of future renewable energy systems. For practical reasons, the work has been carried out as an interaction between five work packages, and a number of reports, papers and tools have been reported separately from each part of the project. A list of the separate work package reports is given at the end of this foreword while a complete list of all papers and reports can be found at the end of the report as well as at the following website: This report provides a summary of the results of the different project parts in a coherent way by presenting tools and methodologies as well as analyses of the design and implementation of renewable energy systems including both energy and environmental aspects. The authors listed in the report represent those who have contributed directly as well as indirectly via the work of the different work packages. By nature this means that each individual author cannot be responsible for every detail of the different reports and papers of work packages conducted by others. Such responsibility relies on the specific authors of the sub-reports and papers. Moreover, individual participants may have personal views that differ from parts of the recommendations of this main report. List of CEESA Background Reports: Part 1: CEESA 100% Renewable Energy Scenarios towards 2050 Part 2: CEESA 100% Renewable Energy Transport Scenarios towards 2050 Part 3: Electric power systems for a transition to 100% Renewable Energy Systems in Denmark before 2050 Part 4: Policies for a Transition to 100% Renewable Energy Systems in Denmark before 2050 Part 5: Environmental Assessment of Renewable Energy Scenarios towards 2050 Henrik Lund, Project coordinator, October

6 International Advisory Panel Statement The world is faced with urgent and complex climate problems manifested by increasing global warming due to emission of greenhouse gases. A major part of the greenhouse gases come in the form of CO 2 from combustion of fossil fuels. So far, however, international negotiations aiming at commitments for reduction of greenhouse gas emissions from consumption of fossil fuels have not been successful in spite of supplementary problems in relation to Peak Oil. On this background, there is a need for concrete analyses and examples that document the technological and social possibilities of phasing out fossil fuels in a way that is acceptable from a social and economic viewpoint. This applies in particular to industrial countries. The Danish CEESA project is a constructive example of such a case study. The CEESA project illustrates that it is possible in Denmark to make a transition from an energy system dominated by fossil fuels to a supply system based completely on renewable energy with a dominating part of intermittent sources like wind and solar. The CEESA scenarios perform this transition before the year 2050 using mainly known technologies in combination with significant energy conservation. Without energy conservation, the transition will be much more difficult to realise. The need for new systems thinking and new planning principles for energy investments is among the important observations in this scenario project. With dominant contributions from intermittent sources and limited amounts of biomass in relation to solutions of storage problems, it is necessary to integrate the electricity, heat and transport sectors much more than in traditional supply systems based on fossil fuels. The CEESA project shows how this can be done in an efficient and economical way. The planning of the transition also requires longer time horizons than the commercial market can offer. As a consequence, it is proposed that the balance between the commercial market and societal planning is shifted to the advantage of societal planning to avoid shortsighted investments. It is an extra benefit of the proposed transition to a renewable energy system that it significantly improves the Danish energy supply security in relation to Peak Oil and the expected increasing oil price. The CEESA project combines its technological scenarios with proposals for policy means supporting the implementation of the selected scenarios. This is an important combination for the further progress and realisation of the proposed transition to a 100 % renewable energy supply system. Without efficient policy means, this transition will not be realised in time. The report has special focus on policy instruments for reduction of energy consumption in the transport and household sectors and it is emphasised that the different supply and consumption sectors typically require different policy means. 3

7 On behalf of the International Advisory Panel, it is my pleasure to recommend the results of the CEESA project to policy makers both in Denmark and internationally. Niels I. Meyer (Chairman), Technical University of Denmark, Lyngby, Denmark Other members of the International Advisory Panel are: Thomas B. Johansson, Lund University, Lund, Sweden Mark Barrett, UCL Energy Institute, London, United Kingdom 4

8 Highlights The output of the project can be divided into three main areas: Firstly, results related to the further development and integration of existing tools and methodologies into coherent energy and environmental analysis tools. Secondly, results related to the analysis of future sustainable energy systems. And finally, dissemination of the results. The result of the CEESA project includes the following highlights: Tools and Methodologies: - Further development of several existing tools such as vehicle drive cycle analysis and energy systems analysis tools including implementation of abilities to analyse new biomass conversion technologies and combined hour balances of storage and exchange of bio(syn)gas as well as electricity and district heating. - Development of a new CEESA transport scenario tool. - A method for qualitative modelling of electricity system control structures and a tool for evaluating control resource use in scenario studies. - Further development of the methodology basis for combining energy system analysis with life cycle assessment. Modelling and Analyses: - Development of biomass resource scenarios and review of potential biomass conversion technologies. - Design and modelling of a transport scenario. - Combined energy system and LCA analyses of a 100% renewable scenario including hour balances of bio(syn)gas production, storage and exchange (additional to balancing and exchange of electricity and district heating). - Evaluation of electricity grid stabilisation with electric vehicles. - Design of a policy and implementation strategy. Dissemination: - Establishment of a dialogue with potential beneficiaries and dissemination of tools and methodologies on an on-going basis including contributions to the Danish Society of Engineers Climate Action plan 2050 (2009), Heat Plan Denmark (2008 and 2010), EnergyTown Frederikshavn and Long-term vision for Aalborg Municipality (2010), among others. - 5 PhD projects (One finalised and 4 expected to be finalised in 2012) book chapters or journal papers conference proceedings and presentations. - Input to proceeding strategic research projects, among others the Zero emission buildings research centre project. - Analyses and report input to a national debate on export of wind power from the Danish energy system, Danish Wind Power Export and Costs (2010). 5

9 Executive summary This executive summary presents the main results of applying the tools and methodologies developed in the CEESA project to the design and implementation of 100% renewable energy systems in Denmark before It is found that the transition from the present energy system dominated by fossil fuels to a system dominated by renewable energy sources requires significant changes in existing policies on both supply and demand sides. This is a change from polluting energy systems dependent on depleting inputs to energy systems that depend on non-depleting inputs and which are relatively abundant, non-polluting and intermittent. In order to succeed, such change requires the system based on renewables to be supported by strong and efficient energy conservation. In Denmark, wind power and biomass are expected to be the two dominant resources in the short and medium term perspectives. In order to ease the pressure on wind and biomass resources, energy conservation becomes essential and so does the inclusion of contributions from additional sources such as solar and geothermal energy. The change requires infrastructure where intermittent renewable energy sources can be managed in such a way that energy is available at the right time and in the right amount for the consumers. A main challenge for the transition planning is to obtain an efficient coordination between investments in the electricity, transportation, and heat sectors. The policy instruments include new systems of taxes, subsidies, tariffs, and other economic conditions in order to obtain an optimal effect. One main problem is to assure an energy-efficient use of low-temperature sources from CHP, waste incineration, industrial surplus heat and geothermal energy. In this relation, a new generation of low-temperature district heating infrastructure becomes essential. Another part of the main problems in a future energy system dominated by intermittent renewable sources (e.g. wind and solar energy) is the stability of the electric grid and the security of supply to electricity consumers. In this connection, biomass in different forms plays a central role as a storage element. However, biomass is also required in the transport sector and for high-temperature industrial process heat (transformed to a liquid fuel or to biogas) while the amount of Danish biomass, taking into account other uses of the land area, is rather limited. In this respect, it becomes important to use the existing natural gas grid including substantial gas storage capacity in order to distribute and store biogas and syngas in future renewable energy systems. The CEESA project presents a technical scenario towards 2050 that achieves the specified goal with emphasis on infrastructures of transport and electricity supply as well as district heating. The CEESA scenario proposes that the best solution is to let electricity from wind power replace the demand for biomass where possible and to stabilise the grid by other means than biomass where relevant alternatives are available. These means include systematic use 6

10 of heat pumps and heat storage, eventually combined with electric cars and gas grid storage. The proposed policy means are selected in accordance with these technological solutions. The CEESA project has documented that it is possible to find technical solutions for a 100 % renewable energy system that meets the required conditions with a satisfactory societal economy. However a certain technological development becomes essential for the coming years. The project has also described a number of new policy instruments for implementing the renewable energy scenario. A summary of some of the concrete considerations is given below. Biomass potential In the CEESA project, significant efforts have been put into identifying the biomass potential. It is emphasised that the potential is dependent on the future use of land area and future farming practices. Currently, a substantial amount of land is allocated to meat production. Consequently, three different scenarios have been analysed: a business-as-usual scenario, conversion to organic farming and enacting dietary changes in the Danish population. For all three scenarios, resources have been estimated both in relation to primary production and in the form of processing waste. Primary resources include dedicated energy crops, wood from forests, parks and gardens; and straw, stalks or leaves from agricultural crops. Secondary biomass resources or biomass in the form of by-products and waste include manure from animal production, processing residues as mill residues, molasses, pulp, whey and wood residues. The results show that in a business-as-usual scenario, the potential is approx. 180 PJ/year, while enacting dietary changes increases the biomass potential to approx. 200 PJ/year. A shift in forest management practices and cereal cultivars could increase the potential further. As a consequence, a target of 240 PJ/year by 2050 has been applied to the scenarios described in the following. Such potential represents the use of residual resources only. A target of 240 PJ/year by 2050 implies a number of potential conflicts due to many different demands and expectations for ecosystems services. Meeting the target in a Danish context requires agricultural land otherwise allocated to food crop production to be converted to energy crop production, potentially reducing food and feed production. All crop residues must be harvested, potentially reducing the carbon pool in soils. A strategy towards increasing the amount of organic agriculture in Denmark will decrease the amount of domestically produced bioenergy available. Moreover, if biomass in a future non-fossil society has to cover the production of materials currently based on petro-chemical products, even more pressure will be put on the biomass sector. A way to reduce conflict potential is to reduce the demand for biomass for energy or to further develop agriculture and forestry in order to increase biomass production per unit of land. 7

11 More details are given in Background Report Part 1: CEESA 100% Renewable Energy Scenarios towards Life cycle analysis To analyse the environmental consequences of the renewable energy systems as well as to assist in the design, a life cycle assessment (LCA) has been performed. Focus has been on the consequences of use of biomass resources. In addition, impacts related to crop changes in Denmark have been assessed and evaluated with respect to the importance to Danish energy production. Different scenarios and solutions of 100% renewable energy have been analysed. The main findings of the LCA are that a consistent abatement of the greenhouse gases (GHGs) (about 66-80% depending on the scenario) can be achieved by implementing renewable energy systems. The main differences between different scenarios are related to the fuels in the transport sector. As an input to the design of future renewable transport systems, the results of the LCA emphasise that the impacts associated with rapeseed cultivation are significantly higher than those associated with willow due to low yield in the rapeseed case. The analyses show that significant aspects of energy crops cultivation can completely offset the benefits of biofuels. This applies especially to the production of biodiesel. Additional to the GHGs, a significant decrease of the acidification and its environmental impact was observed in general for 100% renewable solutions. This is mostly due to reduced emissions of SO 2 and NO x from fossil fuel combustion in power plants. Significant impacts of land use changes (principally indirect) underline that in today s system and given the present institutional set-up of international trade, major impacts related to land use changes can make the option of using fossil fuels for heavy transport preferable to the production and use of biodiesel-like fuels. More details are given in Background Report Part 5: Environmental Assessment of Renewable Energy Scenarios towards 2050 Transport scenario The CEESA project has put special emphasis on the development of scenarios for renewable energy in the transport sector. This complex sector poses a significant problem in renewable energy systems. The project presents a model of the existing Danish transport sector as well as a projection towards International aviation, international sea, trucks, cars and other vehicles related to Danish passenger and freight transport are considered in the CEESA project. This provides a complete assessment of the requirements needed to implement renewable energy in the sector. The overall results indicate that direct electricity should be given priority over 8

12 all biofuels in the transport sector and that co-electrolysers will need to be developed in the future to maintain a sustainable biofuel consumption. The CEESA project describes three different 100% renewable energy transport scenarios which emphasise the urgency of strong investments in advanced public transport, in the development of more efficient electric vehicles, and in the development of co-electrolyserbased synthetic fuels, especially for aeroplanes and heavy-duty vehicles. This can also reduce the pressure on the biomass resource. As part of this work, a number of detailed, generic and transparent analyses of current stateof-the-art battery electric vehicles have been conducted under realistic conditions. Such analyses show that the present technology has challenges to overcome before it can meet the general expectations as presented in most literature. Consequently, it should be stressed that the present technology needs further development in order to be able to fulfil the preconditions for the future scenarios. Finally, it is also evident from the results that a 100% renewable energy transport sector can be achieved with lower costs than the business-as-usual reference which is forecasted for Denmark s transport system. More details are given in Background Report Part 2: CEESA 100% Renewable Energy Transport Scenarios towards Technological development and renewable energy scenarios The aim of the CEESA project has been to design a relevant scenario for transforming the present energy system based mainly on fossil fuels into a 100% renewable energy system by year The design of such scenario highly relies on the technologies which are assumed to be available within the chosen time horizon. To highlight this issue, the CEESA project has identified the following initial scenarios based on three different assumptions with regard to the available technologies: CEESA-2050 Conservative: The conservative scenario is created using mostly known technologies and technologies which are available today. This scenario assumes that the current market can develop and improve existing technologies. In this scenario, the costs of undeveloped renewable energy technologies are high. Very little effort is made to push the technological development of new renewable energy technologies in Denmark or at a global level. However, the scenario does include certain energy efficiency improvements of existing technologies, such as improved electricity efficiencies of power plants, more efficient cars, trucks and planes, and better wind turbines. Moreover, the scenario assumes further technological developments of electric cars, hybrid vehicles, and bio-dme/methanol production technology (including biomass gasification technology). 9

13 CEESA-2050 Ideal: In the ideal scenario, technologies which are still in the development phase are included on a larger scale. The costs of undeveloped renewable energy technologies are low, due to significant efforts to develop, demonstrate and create markets for new technologies. For example, the ideal scenario assumes that fuel cells are available for power plants, and biomass conversion technologies (such as gasification) are available for most biomass types and on different scales. Coelectrolysis is also developed and the transport sector moves further towards electrification compared to the conservative scenario. CEESA-2050: This scenario is a realistic and recommendable scenario based on a balanced assessment of realistic and achievable technology improvements. It is used to complete a number of more detailed analyses in the project, including the implementation strategy, as well as in a number of sensitivity analyses. Here, however, less coelectrolysis is used and a balance is implemented between bio- DME/methanol and syn-dme/methanol in the transport sector. This is the main CEESA scenario. The Conservative and Ideal scenarios are used to illustrate that different technological developments will have different effects on the extent of the use of biomass resources, as well as the requirements for flexibility and smart energy system solutions. In all scenarios, energy savings and direct electricity consumption are given a high priority. In the CEESA scenarios, the smart energy system integration is crucial. The scenarios rely on a holistic smart energy system including the use of: heat storages and district heating with CHP plants and large heat pumps, new electricity demands from large heat pumps and electric vehicles as storage options, electrolysers and liquid fuel for the transport sector, enabling storage as liquids as well as the use of gas storage. Such smart energy systems enable a flexible and efficient integration of large amounts of fluctuating electricity production from wind turbines and photovoltaics. The gas grids and liquid fuels allows long-term storage, while the electric vehicles and heat pumps allows shorter term storage and flexibility. All the above three technology scenarios are designed in a way in which renewable energy sources, such as wind power and PV, have been prioritized, taking into account the technological development in the scenarios and the total costs of the system. Moreover, they are all based on decreases in the demand for electricity and heat as well as medium increases in transport demands. Consequently, none of the scenarios can be implemented without an active energy and transport policy. However, sensitivity analyses are conducted in terms of both a high energy demand scenario as well as the unsuccessful implementation of energy saving measures. These analyses point in the direction of higher costs, higher biomass consumption and/or a higher demand for more wind turbines. 10

14 In the conservative technology scenario, wave power, photo voltaic and fuel cell power plants are not included and emphasis is put on bio-dme/methanol and on direct electricity consumption in the transport sector. The electrolysers are based on known technology in this scenario. Smart energy systems and cross-sector system integration is required between the electricity system, district heating sectors as well as into the transport system and gas grid in all scenarios. The integration into the transport system and gas grids is, however, not as extensive in the conservative scenario as in the ideal scenario. In the ideal scenario, wave power, photo voltaic, fuel cell power plants, and a number of other technologies are used to their full potential, while, in the recommendable scenario, the technologies are assumed to be developed to a degree in which they can make a substantial contribution. For all technologies, sensitivity analyses are made in which they are replaced with existing technologies. The primary energy consumption for 2050 of the three scenarios and the reference energy system is compared in Figure 1 below. Compared to the reference energy system, all the scenarios are able to reduce the primary energy supply to a level of approximately 500 PJ. There are however large differences between the structure of this primary energy supply. In the conservative technology scenario, a 100% renewable energy system is possible with a total biomass consumption of 331 PJ. The ideal technology scenario can decrease this consumption to 206 PJ of biomass. In the CEESA 2050 recommendable scenario, the biomass consumption is 237 PJ and thus 30 PJ higher than in the ideal and 96 PJ lower than in the conservative scenario. In all three scenarios, hour-by-hour energy system analyses have been used to increase the amount of wind turbines to an amount ensuring that the unused electricity consumption, also referred to as excess electricity, is lower than 0.5 TWh (1,8PJ). These analyses also ensure that the heat supply and gas supply is balanced. The importance of that is visible in the differences in the installed wind power capacities in the three 100% renewable energy scenarios, i.e., the ideal scenario is able to utilise more wind power than the conservative scenario. The recommended CEESA scenario The current primary energy supply in Denmark (fuel consumption and renewable energy production of electricity and heat for households, transport and industry) is approximately 850 PJ, taking into account the boundary conditions applied to transport in this study, in which all transport is accounted for, i.e., national/international demands and both passengers and freight. If new initiatives are not taken, the energy consumption is expected to decrease marginally until 2020, but then increase gradually until 2050 to about 970 PJ. The reference energy systems follow the projections from the Danish Energy Authority from 2010 until 2030, and the same methodology has then been applied here to create a 2050 reference energy system. The measures of savings, transport as well as renewable energy and system integration between the electricity, heat, transport and gas sectors can reduce the primary energy supply to 669 PJ in CEESA 2020; 564 PJ in CEESA 2030; 519 PJ in 2040, and 473 PJ in CEESA 2050, respectively. At the same time, the share of renewable energy from wind turbines, photovoltaic, solar thermal, and wave energy, as well as biomass will be increased. The share of renewable 11

15 PJ/year energy in the recommended energy system increases from about 20 % in 2010 to 42 % in 2020 and to about 65 % in If the oil and gas consumption in refineries and for the extraction of oil in the North Sea is excluded, 73 % is the share of renewable energy in the 2030 energy system. Coal is phased out before In 2050, the entire Danish energy system (incl. transport) is based on 100 % renewable energy. The primary energy supply is illustrated in Figure 2. More details are given in Background Report Part I: CEESA 100% Renewable Energy Scenarios towards Primary energy consumption in CEESA scenarios for 2050 Unused electricity Wave power Wind power PV 700 Solar thermal Geo thermal Waste incineration Biogas, manure Straw, wood & energy crops (Solid for boilers, industry etc.) Wood, energy crops (gasified for Transport) Wood, energy crops (gasified for CHP) Natural gas 100 Oil 0 Reference 2050 CEESA 2050 Conservative CEESA 2050 Ideal CEESA 2050 Coal Figure 1: Primary energy supply in the 2050 reference energy system and the three CEESA 100% renewable energy scenarios. 12

16 PJ/year Primary energy consumption in CEESA Reference CEESA Coal Oil Natural gas Biomass (gasified) Biomass (solid) Biogas, manure Waste incineration Geo thermal Solar thermal PV Wind power Wave power Unused electricity Figure 2: Primary Energy Supply in CEESA. Future power systems Special attention has been given to qualifying the hourly-based scenario analyses of future energy systems by investigating the short-term situation of the electricity system and relating the scenario findings to the design of future control structures. The analyses were manifested in two main parts. In the first part, analyses of electric vehicle (EV) based battery storages to support large-scale integration of wind power in Denmark were in focus. 13

17 The second part included methodology development for evaluation, analysis and selection of future control strategies for different power system structures. Electricity generated from wind power forms a significant fraction in all scenarios, ranging from 50% to 200% of the projected conventional electricity demand which will dramatically increase the need for system balancing in response to prediction errors and short-term fluctuations. Electricity systems in operation today have been proven capable of integrating about 20% fluctuating generation. The means offered in the CEESA scenario include a largely increased availability of controllable electricity consumption units by integration with other energy sectors and cheap demand-side storage, supplying sufficient reserves on the hourly level. For future power system operation, some of today s notions, such as peak demand or base load generation, become less meaningful and thus need to be revised. A general paradigm of flexibility will be supported by probabilistic notions of balancing capacity. For the design of operation strategies, a more explicitly function-oriented and formal modelling approach is described. In particular, the fundamental role of synchronous generators in power system operation will need to be reconsidered. With regard to evaluation, a more explicitly risk-oriented modelling approach enables an informed selection of future power system operation strategies. The design of new control structures is an incremental, experimental development. It is therefore important to further develop simulation platforms that enable the evaluation of operation strategies in the context of future power systems scenarios. More details are given in Background Report Part 3: Electric power systems for a transition to 100% renewable energy systems in Denmark before Policy instruments for implementation of a transition to 100% renewable energy systems A part of the CEESA project has been to define policies and market design in order to make a complete transition in Denmark from fossil fuels to renewable energy sources before The policy instruments include new systems of taxes, subsidies, tariffs, and other economic conditions in order to obtain an optimal effect. In addition, a number of institutional and regulatory changes are proposed. A central question in this connection is the balance between the role of the market and the role of societal planning and regulation. Considering the long lifetime of many energy plants and infrastructures, including buildings, it is concluded that the balance needs to be shifted to increase the role of long-term societal planning and regulation. A challenge for the transition planning is to obtain an efficient co-ordination between investments in the electricity, transportation and heat sectors. 14

18 A number of macro-economic barriers exist for the transition from fossil fuels to renewables e.g. in relation to market structures that support lock-in action for technologies based on fossil fuels. In Denmark, another barrier is the prevalence of high discount rates for the planning of future investments. Some of the existing barriers can be removed (or reduced) by national changes of tariffs, taxes and other policies, and of the planning methodologies and priorities, while others may need changes at the EU level. These changes will require alternative political decisions at high levels in Denmark and the EU. However, the political mechanisms of the paths to these high-level decisions are not part of this report. The CEESA proposals for policy instruments are based on a list of criteria where the highest priority is given to efficient fulfilment of the overall goal of the CEESA project: 100 % renewables in the Danish energy supply before Other criteria include consideration of economic efficiency, social balance in the policies, promotion of Danish employment and industrial production, and policies that support public involvement for energy conservation. More details are given in Background Report Part 4: Policies for a Transition to 100% Renewable Energy Systems in Denmark Before

19 1 Introduction 1.1 Research Project Aim and Focus The main focus of this project has been - to further develop and integrate existing tools and methodologies of environmental life cycle assessment and energy system and market analysis into coherent energy and environmental analysis tools. - to apply such integrated tools and methodologies to the analysis of future sustainable energy systems with an emphasis on: 1) how to integrate the transport sector including considerations of limitations in biomass resources; 2) how to develop future power systems suitable for the integration of distributed renewable energy sources; and 3) how to develop efficient public regulation in an international market environment. The hypothesis has been that the prioritisation between the use of different renewable energy and biomass resources has become of significant importance to the development of sustainable energy systems in countries such as Denmark. Consequently, the design and evaluation of energy systems cannot be done properly without comprehensive environmental assessment tools. To obtain a truly sustainable energy system, it is important to optimise not only individual sub-systems (e.g. the electricity distribution system, the transport system, the production system, etc.) but also the overall energy system. Most discussions about environmental aspects of energy production have so far focused on greenhouse gas emissions directly related to the production phase. It should, however, be emphasised that all phases, both upstream and downstream of the actual energy production (electricity, fuels, energy carriers), may significantly affect the overall environmental impacts. As a consequence, a number of indirectly related processes and impacts must be addressed as well. Environmental aspects must be assessed at systems level, including all relevant subprocesses (e.g. biomass production, resource handling and upgrading, waste disposal, etc.) and derived processes (e.g. effects on crop markets, resource scarceness). Environmental impact modelling in a life cycle perspective provides a useful framework for such analyses in combination with a detailed technical knowledge of the systems and technologies involved. The work process of the project is shown in Figure 1.1. The work has taken its point of departure in state-of-the-art energy system and LCA analyses of 100 per cent renewable energy systems followed by further developments of methodologies and tools within four sub-themes, ending up with coherent energy and environmental system analyses of the same systems. 16

20 Energy scenarios Based on state-of-the-art LCA and Energy System and Market Analysis Transport and Renewable Energy Future Electric Power Systems Market and Public regulation Environmental Assessment Coherent Energy and Environmental Analysis Connected theory and methodology Figure 1.1: Under an overall range of scenarios, the work has been carried out within four sub-themes that were subsequently integrated and included in the development of tools and methodologies for a new generation of coherent energy and environmental analyses. 1.2 Initial State-of-the-art LCA and ESA analyses In the initial phases of the CEESA project, existing energy system and LCA models were used to present state-of-the-art analyses of 100 per cent renewable energy scenarios for Denmark. The 100 per cent renewable energy scenario of the Danish Society of Engineers (IDA) Energy Plan 2030 for Denmark, published in December 2006 one month before the beginning of the CEESA project, was used as a starting point for the analyses, and the following four scenarios with different use of biomass and different developments in demands were identified: - The two 100 per cent renewable energy scenarios from the IDA Energy Plan published by the Danish Society of Engineers in December 2006 which ensured scenarios with high degrees of biomass versus high degrees of wind, and - The two IDA scenarios were extended with two similar scenarios with higher energy demands. The energy demands of 2004 were chosen. The state-of-the-art energy system analysis is published and documented in (Lund 2007, Lund and Mathiesen 2009 and Lund 2010). The following main conclusions can be highlighted: A 100 per cent renewable energy supply based on domestic resources is physically possible, and the first step towards 2030 is feasible for Danish society. However, when reaching a high share of intermittent resources in combination with CHP and savings, the development of renewable energy strategies becomes a matter of introducing and adding 17

21 flexible energy conversion and storage technologies and designing integrated energy system solutions. LowDemand_Biomass HighDemand_Biomass Wind 600 Wind 500 Biomass 500 Biomass 400 Others 400 Others Demand Supply Electricity Heat Industry Transport Demand Supply Electricity Heat Industry Transport LowDemand_Wind HighDemand_Wind Wind 600 Wind 500 Biomass 500 Biomass 400 Others 400 Others Demand Supply Electricity Heat Industry Transport Demand Supply Electricity Heat Industry Transport Figure 1.2: The four initial scenarios with different biomass resources and different energy demands were initially identified as a framework for the CEESA project. An initial screening of the environmental aspects of three energy scenarios with various shares of biomass and wind power was carried out in a life cycle perspective. The initial state-of-the-art LCA was based on the EDIP methodology (EDIP: Environmental Declaration of Industrial Products) and carried out in the GaBi4 LCA software. Environmental impacts and consumption of non-renewable resources were included, while impacts on the working environment were excluded. 18

22 This initial LCA was not a full LCA modelling (e.g. consequences of land use changes were not included) but rather a screening intended to highlight important aspects which should be further addressed in the CEESA project. The LCA screening was based on output data from an energy system analysis of the abovementioned initial scenarios. Due to the comparative approach applied, the LCA screening covered only aspects in which the two scenarios differed from each other. In terms of primary energy supply, the scenarios differed only in their utilisation of biomass and wind power, while the use of other RES, such as solar thermal, wave power and photovoltaic, was identical. Regarding biomass utilisation, the only difference between the scenarios was the amount of biomass used for power and district heating. It was roughly assumed that the biomass feedstock used for this production was energy crops (willow), thus assuming that biomass residues/waste were utilised for other applications within the energy system (transport, industrial heat production, etc.). In Table 1.1, an overview is given of the scenario differences and the specific technologies assumed for the LCA screening. Parameter Unit Biomass Wind scenario scenario Technology assumed Scenario difference Biomass for CHP/PP TWh/y SOFC plants using producer gas from two-staged biomass gasification Operation, Biomass gasification capacity Biomass used in boilers TWh/y Boiler based on wood chips (grate firing) Operation Offshore wind power MW Capacity capacity Offshore wind turbines Offshore wind power TWh/y Operation production Electrolysis capacity (for MW grids 2 and 3)* Electrolysis plants using reversed Capacity Electrolysis operation TWh/y SOFC s (for grids 2 and 3)* Operation Hydrogen for CHP TWh/y SOFC plants using hydrogen Operation Hydrogen used in boilers TWh/y Boilers using hydrogen Operation Hydrogen storage (for TWh/y High pressurised tanks (glass fibre grids 2 and 3)* laminated steel tanks, 30 bar) Capacity Table 1.1: Overview of LCA screening scenarios and technologies (rounded numbers). Grids 2 and 3 are meant to represent district heating systems based on small and large CHP plants, respectively. CHP: Combined Heat and Power, PP: Power Production, SOFC: Solid Oxide Fuel Cell (planar cells assumed). A large share of materials/inputs used in the scenarios was likely to be produced in countries outside Denmark. As such, the production of these inputs could not immediately be assumed to be based on renewable energy sources. In a life cycle perspective, upstream energy consumption (power, process heat and transport) traditionally contributes to a significant part of the environmental impacts of products/product systems. The impacts associated with energy consumption are highly dependent on the given energy production technology. However, it is highly uncertain which technologies will deliver the marginal power and heat production for the processes involved in the scenarios. The uncertainty was 19

23 Primary energy (TWh/y) particularly high considering the time horizon for the 100 per cent RES scenarios (e.g. 2050). Based on the above considerations, upstream energy use was modelled separately and quantified in "energy units" serving as an indicator for impacts and resource consumption associated with energy use. This approach provided more transparent results better suited for later evaluation of sensitivity and scenario adjustments. Recycling was assumed for materials which are typically recycled, such as steel, iron, aluminium, lead and copper. However, material losses were still assumed to exist resulting in net waste generation. Apart from quantifying net waste generation in amounts, emissions from most landfill waste were also included. According to the screening (See Fig. 1.3), more upstream energy was consumed in the wind scenario compared to the biomass scenario. The main part of the energy use in the wind scenario was related to manufacture of offshore wind turbine farms and hydrogen storage tanks, while energy crop production was the dominating energy consumer in the biomass scenario. In both scenarios, the main share of primary energy consumption took place during material production rather than during manufacture of components/plants or disposal processes. 3,5 3,0 2,5 Upstream net energy consumption Electrolysis capacity, SOFC cells Electrolysis capacity, plant Wind turbine farms 2,0 1,5 1,0 0,5 Transport of biomass H2 storage capacity Energy crop production Bio gasification plant 0,0 Biomass scenario Wind scenario Figure 1.3: Upstream energy consumption result of LCA screening. The wind scenario was characterised by larger waste generation; i.e. amounts of bulky waste, hazardous waste, slag and ashes. The higher amounts of waste were mainly generated from disposal of wind turbine farms, hydrogen storage tanks and electrolysis 20

24 plants. On the other hand, the biomass scenario induced a larger contribution to nutrient enrichment, global warming, acidification and photochemical ozone formation compared to the wind scenario. Larger energy crop production and production of fertilisers in the biomass scenario were the main reason for the larger contribution to the first three of these impact categories. The main emissions contributing to these impacts were nitrate and phosphate leaching, nitrous oxide, ammonia, and nitrogen oxide emissions to air. Hydrocarbon emissions from SOFC plants based on biomass producer gas caused the larger contribution to photochemical ozone formation in the biomass scenario (See Figure 1.4) Slag and ashes Hazardous waste Environmental impacts, Normalized Bulky waste Photochemical ozone formation Stratospheric ozone depletion Nutrient enrichment Biomass scenario Wind scenario Global warming Acidification Person Equivalents Figure 1.4: Environmental impacts (LCA screening) 21

25 Human toxicity water Human toxicity soil Human toxicity air Ecotoxicity water chronic Ecotoxicity water acute Ecotoxicity soil chronic Toxicity potentials, Normalized Person Equivalents Biomass scenario Wind scenario Figure 1.5: Toxicity potential (LCA screening) With respect to toxicity impact potential (see Fig. 1.5), the biomass scenario caused significantly larger contributions to ecotoxicity. The reason was higher consumption of pesticides due to larger energy crop production. In the biomass scenario, the main consumption of scarce material resources was associated with manufacture of offshore wind turbines and included metals, such as zinc, lead, iron, copper and aluminium. As more wind power was included in the wind scenario, scarcity of material resource was more pronounced here. The total material resource consumption in the wind scenario was approximately PR (Person Reserves) compared to PR in the biomass scenario. The consumption of yttrium for ceramic materials in reversed SOFC s in the wind scenario was the dominating resource consumption ( PR). Arable land resources and the environmental impacts related to changes in crop production (direct land use changes) and market related responses to the changes in crop production (indirect land use changes) represent very important contributions to the environmental impacts related to biomass based energy production. Use of arable land for biomass production was not quantified in the LCA screening, but development of the necessary methodological framework and LCA modelling of environmental impacts related to the changes in land use (as induced by the energy production) was included as a significant part of the LCA activities in the CEESA project. 1.3 Initial conclusions and project framework The initial energy system analysis identified the following improvements of system flexibility as being essential to the conversion of the energy system into a 100 per cent renewable system: Firstly, relevant substitutions for oil products in the transport sector 22

26 must be found. Given the limitations of biomass resources, solutions based on electricity become key technologies. Moreover, such technologies (direct electric vehicles as well as hydrogen or similar energy carriers produced fully or partly from electricity) increase the potential of including wind power in the ancillary services of maintaining the voltage and frequency of the electricity supply. The next key point is to include small CHP plants in the regulation as well as adding heat pumps to the system. Such technologies are of particular importance since they provide the possibility of adapting to intermittent wind electricity while maintaining the high fuel efficiency of CHP. The third key point is to add electrolysers to the system and, at the same time, provide for a further inclusion of wind turbines in the voltage and frequency regulation of the electricity supply. In the CEESA scenario, electric and hydrogen fuel cell vehicles are introduced into the entire transport sector. If such solution is replaced by biofuel-based transport technologies, the need for biomass resources is nearly doubled. Consequently, the project emphasises the importance of further developing electric vehicle technologies. Moreover, it indicates that biofuel transport technologies should be reserved for the areas of transport in which the electricity/hydrogen solution proves insufficient. Biomass resources should in general be prioritised for fuels and chemical feedstock in applications where carbon content, high energy density and fuel storage are most needed. The project documents that Denmark can be converted into a supply of 100 per cent renewable energy consisting of 280 PJ/year biomass, 19 PJ solar thermal, 2,500 MW power from waves and PVs and 10,000 MW wind power. Moreover, the study shows how biomass resources can be replaced by more wind power and vice versa and points out that Denmark will have to consider to which degree it should rely mostly on biomass resources or on wind power. The solution based on biomass will involve the use of present farming areas, while the wind power solution will involve a significant share of hydrogen or similar energy carriers leading to certain fuel inefficiencies in the system design. The LCA screening focused on the environmental impacts related to direct emissions and activities within the Danish energy and transport sectors. It was shown that the use of resources, in particular biomass resources, was contributing with the largest impacts overall. As a consequence, it was concluded that further development of the energy scenarios in the CEESA project should focus on minimising the use of biomass resources and preferably limit these to residual biomass resources. Based on the LCA screening, the following aspects were deemed relevant for the project: - Impacts from energy crop production are important; biomass consumption in the energy systems should therefore be as low as possible. The types of biomass resources (and related arable land resources) used for energy production may significantly affect the overall environmental impacts associated with the energy production. - System boundaries and approaches for including impacts related to land use changes. 23

28 2 Tools and Methodologies In the following, the terminology tool is used for, e.g., energy system analysis computer tools such as EnergyPLAN, while the terminology model is used for the description of a certain energy system by use of the tool. The development of tools, models and methodologies of coherent energy and environmental analysis has included further development and integration of existing tools and methodologies as well as development of new tools. Moreover, models have been implemented into existing tools. The work of the CEESA project includes the following: 2.1 The EnergyPLAN tool The EnergyPLAN energy system analysis is an existing tool which has been developed and expanded into its present version since In the beginning of the CEESA project, the tool was used to present state-of-the-art energy system analyses of 100 per cent renewable energy scenarios for Denmark. New options implemented in the tool, such as different transportation options and different individual heating options together with options to calculate total annual socio-economic costs, were tested and applied to an Energy Plan 2030 for Denmark in co-operation with the Danish Society of Engineers (IDA). Later on, in 2009, the tool was used to design the IDA Future Climate Plan and the CEESA scenarios. The different work packages have continuously developed descriptions on individual technologies and regulation strategies which have been implemented in the EnergyPLAN tool. The CEESA project has contributed with the following: - New user interface and the establishment of a website where the model can be downloaded together with documentation and an online training programme. - New facilities of waste-to-energy technologies in combination with geothermal and absorption heat pumps. - New facilities to use COST data. - A number of biomass conversion plants and their integration into heat and electricity supply including biogas, gasification, biodiesel and biopetrol (ethanol) plants. - New facilities to conduct grid gas (natural gas and/or bio/syngas) balancing analyses including import/export and the use of gas storage and active regulation of gasification plants. - Implementation of additional grid stabilisation options (see the section below about the grid stabilisation tool for further explanation). The complete tool, including documentation, references and all contributions from the CEESA project, is made available on 25

29 2.2 The Balmorel Tool The Balmorel tool is an existing tool which was originally developed within the framework of the Balmorel project hosted by the former Danish TSO ElkraftSystem. The original project ( ) was financed by the Danish Energy Research Programme as well as by the institutions involved in the project and was aimed at the Baltic Sea region. The participants were research institutions from most countries in the region. The Balmorel tool has subsequently been developed and applied in various contexts and is not limited to the original focus region. The Balmorel tool is open source and is available on where documentation and case studies may also be found. The tool is programmed in GAMS (General Algebraic Modelling System) and can be operated with or without user interface with direct access to the code. A GAMS license and a linear programming solver are required to operate the tool. During the CEESA project, a method has been developed to convert the CEESA energy scenarios to the Balmorel structure, and a model of the IDA 2050 scenario with 100 per cent renewable energy has been created in Balmorel. The IDA 2050 was the starting point for the final CEESA scenario. For the surrounding countries, data from the Balmorel Perspective scenario from the project Efficient district heating in the future energy system have been used, where a 90% reduction in greenhouse gases in Denmark and the neighbouring countries is imposed. The structure and functionality of the Perspective model have been maintained with 21 district heating areas in Denmark and economic optimisation of investments and operation of energy production and transmission. To resemble the CEESA scenarios, a restriction has furthermore been added to ensure continuous use of waste over the year and a representation of the flexible demand of electric vehicles similar to the one applied to EnergyPLAN has been implemented. Balmorel covers the Nordic area, including Denmark, Finland, Norway and Sweden, the northern part of Germany and the Baltic countries. Thus, the tool is developed with international trade of power as an integral part. Balmorel has been used to determine the long-term price of power and also to show the impact of international trade on the Danish energy system. Such long-term prices have been used to create input to the EnergyPLAN modelling of the CEESA scenarios. 2.3 The ADAM/EMMA Tool The ADAM/EMMA models are an existing set of modelling tools which have been used as a baseline for forecasting long-term demand of energy in Denmark. ADAM is the macroeconomic tool used in Denmark by the Ministry of Finance for preparing the official forecasts for the Danish economy. EMMA is the interlinked energy demand tool that converts the economic forecasts to energy demand forecasts. The baseline developed in the CEESA project is based on the latest forecasts for economic growth published by the Ministry of Finance. 26

30 During the CEESA project, major developments of the ADAM/EMMA models have taken three directions: - The interlink between the economic tool ADAM and the energy tool EMMA has been improved. - A new model for transport has been developed. - Tool equations, especially for energy intensive sectors, have been improved. Currently, EMMA may be run either as a satellite tool to ADAM or the two tools may be run simultaneously. Running EMMA as a satellite tool ensures that official economic forecasts are not changed but are used as an exogenous input to the analysis. Running ADAM/EMMA simultaneously assures consistency between the two tools and macroeconomic effects of changed energy consumption may be evaluated. A new model for the energy consumption within transport has been developed and included in EMMA; this is done by dividing the demand for transport into transport of goods and transport of people. Transport of people is further divided into transport to and from work and transport in people s leisure time. Equations for the transport needs, level of substitution between collective and private transport and energy efficiencies are estimated on historical data. In addition, for transport of people a model analysing effects of introducing electric vehicles has been developed, the main issue being that electric vehicles are expensive, but when having an electric vehicle the marginal cost of using it is low. The main implication of electric vehicles is increased energy efficiency in transport; rebound effects and the substitution from public to private transport are present, but the aggregated effect is a considerable reduction in the energy consumption. The model and analysis were presented at the IAEE conference in Vilnius, August 26-28, During the CEESA project, model equations have been re-estimated and especially equations for the energy intensive sectors have been improved. Over the last couple of years and especially during the financial crisis, energy intensive sectors have been reduced and model equations for these sectors have needed revision. EMMA determines the individual industries demand for electricity, other energy, and transport energy. Electricity is substituted by other energy for some industries, while other industries do not have the option of changing between these. For other energy, a certain degree of substitution is assumed for the industries between oil, coal, gas, district heating, and biomass, while exogenously fixed shares are used for the households. The ADAM and EMMA models have been used to create energy demand projections until ADAM/EMMA are used by the Danish Energy Authority for projections of energy demand and the model, data and documentation may be downloaded from the website of the Danish Energy Authority: 27

31 2.4 Grid Stability: Methods and Models The EnergyPLAN and Balmorel tools and models are based on deterministic hourly energy balances. While this suffices for most analyses on the level of resource requirements in energy systems, it is also required for the electricity system to remain stable and continuously balanced, also within the hour. Voltage and frequency stability is affected by the momentary conditions and both voltage and frequency need to remain within certain limits. Electricity generated from wind power forms a significant fraction in all scenarios, ranging from 50% to 200% of the projected conventional electricity demand, which will dramatically increase the need for system balancing in response to prediction errors and short-term fluctuations. Electricity systems in operation today have not been proven capable of integrating this amount of fluctuating generation and operational principles have to be adapted significantly. This implies that existing tools and methods for analysing electricity system operation are not designed to fulfil such requirements. Therefore, it has been one of the project aims to develop tools and methodologies for assessing the impacts of scenarios established on an hourly scale using the EnergyPLAN model on the electricity system. The contributions of the CEESA project are divided into three parts, a quantitative analysis based on existing methods, a qualitative study of scenario requirements which led to the design of new modelling methods, and an adaptation of the EnergyPLAN tool to improve calculation of intra-hour fluctuations. Existing models can be employed to quantify the incremental contribution individual new technologies can make to improve the system operation. Models of the first part of the work have been the following: - Establishment of a case model in DIgSilent for the island of Bornholm for the frequency response analyses of scenarios defined in EnergyPLAN. The DIgSilent is an existing commercially available tool for electric analyses which already contains a global library with e.g. steam, gas, and wind turbine models. Other systems and components (battery storages, grid models for Bornholm, Lolland etc.) have been modelled separately using the tools available within the DIgSilent - Analyses of electric vehicles effect on the grid stability of the electricity system with the aim of establishing recommendations for the handling of the grid stabilising ability of electric vehicles in the EnergyPLAN tool The analyses are presented in separate articles but as mentioned, the modelling software tool is a commercial product. The second part of the work examined what additional factors need to be investigated in order to substantiate the technical feasibility of the CEESA scenarios, and how these factors could be studied. The main factors influencing the operation under high wind power penetration are the limited predictability, and the potentially large wind power fluctuations. The means offered in the scenarios include a largely increased availability of controllable 28

32 electricity consumption units by integration with other energy sectors and cost-effective demand-side storage. Contributions aimed at modelling electricity system operation with these types of units as well as the representation of new control structures include: - Extending grid models with a generalised energy buffer model. The theoretical concept of the so-called Power Nodes model is described in separate articles and its implementation is based on the numerical programming environment MATLAB. - Adapting an existing functional modelling approach (Multilevel Flow Modelling (MFM)) and extending it to model the electricity system s control architecture. The modelling methods of the second part of the work are going to be considered in future studies. Further, results of the modelling work in work package 3 lead to suggestions for future improvement of the EnergyPLAN tool. Due to its nature, the EnergyPLAN tool relies on a simplified grid stability system rather than actual dynamic simulations. Generating technologies are split up into two general categories; technologies that may support grid stability and technologies that may not. For most of the technologies that may support grid stability, the user may additionally specify which share of the given stock of the given technology that may do so. Other technologies are by default assumed to be grid stabilising while yet others cannot support grid stability. Supported by the analyses in the CEESA project, the EnergyPLAN tool has been expanded to allow additional technologies to assist in supporting grid stability. This includes electric vehicles, vehicle to grid and interconnections to outside areas. Waste CHP has also been included as a grid stabilising technology. Electric vehicles as well as vehicle to grid are already employed on an hourly basis in the EnergyPLAN model to ensure the hourly balance between electricity production and demand. However, analyses have demonstrated that the technologies may also have a role to play in fast regulation and thus frequency stability. Similarly, interconnections are already used on an hourly basis to ensure the balance between electricity production and demand, but interconnections can and will also play a part in maintaining grid stability. EnergyPLAN has therefore been expanded with the ability to model a certain fraction of interconnection capacity as grid stabilising. Depending on the general energy system configuration, this may have varying impacts on the performance of the energy system. If other grid stabilising technologies are scarce, the model can decrease the production that would otherwise have to be at condensing mode power plants solely for grid stability reasons. However, if technologies such as wind turbines or photovoltaic cells are employed in large scale, the impact is less and the grid stability criteria are more likely to already have been met if they are assumed grid stabilising. In actual applications, production would be less if units are grid stabilising as they would need to be curtailed to enable upward regulation; however, this has not been quantified. The simulation tools and models as well as documentation will be available at the CEESA website 29

33 2.5 The CEESA Transport Scenario Tool The CEESA Transport Scenario tool is a national transport scenario modelling tool developed as part of work package 2 of the CEESA project. It consists of a single MS Excel spreadsheet providing the user with a quick, easy and detailed overview of the various inputs and outputs. The tool enables the creation of transport and energy demand scenarios related to the activities of Danish citizens, in Denmark or abroad, and goods consumed in Denmark towards The resulting transport and energy demand is available for 2010, 2020, 2030 and The tool contains detailed information with regard to transport and energy demands for passenger and freight transport, specific energy consumptions, coefficients of utilisation and the share of different fuels for a wide range of transport modes, including subdivisions of several transport modes according to transport distance and purpose (work and leisure). The tool makes it possible to vary the projections of the transport demand for different modes of transport, change vehicle-specific energy consumption, include a technology efficiency factor, change the coefficients of utilisation and to perform modal shifts between selected modes of transport for the periods of , , and Furthermore, it is possible to introduce pre-selected new or future vehicle and fuel technologies. For optimum utility, the model requires that the user has detailed knowledge of the transport system, demand and energy projections, possibilities to improve efficiencies of technologies, and the possibility to implement modal shifts and new technologies. TransportPLAN as well as its supporting documentation is available on the CEESA website, 2.6 Vehicle Drive Cycle Design and Simulation Tool A design and simulation tool of a current state-of-the-art battery electric vehicle (BEV) and a fuel cell hybrid electric vehicle (FCHEV) has been developed in Matlab/Simulink as part of the CEESA project. The methodology of the tool and model is a further improvement of the simulation model developed in the PhD project Design of a Fuel Cell Hybrid Electric Vehicle Drive System, 2010, by Erik Schaltz. The input to the vehicle model developed in the CEESA project is a given drive cycle, i.e. a time-speed curve. The simulation model designs the main components of the drive system, i.e. the drive train, electric machines, power electronics, battery, and fuel cell. The vehicles are designed to handle the maximum power end energy requirements due to the drive cycle input. The output of the simulation model is the consumed fuel of the vehicle, i.e. the grid energy of the BEV and hydrogen energy of the FCHEV, total vehicle mass, volume of drive system, and total vehicle cost. The cost calculation is a new feature compared with the simulation model developed in the PhD project. The simulation model consists of several sub-models, e.g. vehicle forces, electric machine, power electronics, battery, and fuel cell, which have a non-constant efficiency. The simulation tool and model as well as documentation will be available at the CEESA website 30

34 2.7 Life Cycle Assessment (LCA) Methodology Existing life cycle modelling software is typically based on extensive databases containing information about emissions related to a long range of technologies and processes. Within an LCA, these data are used for modelling the potential environmental impacts related to specific systems of technologies and processes which comprise the modelled scenarios in question. The results of LCA modelling, however, depend heavily on the quality of technology data included in the assessment. Existing LCA databases typically rely either on general (average) data or data for specific technologies not appropriate for the scenarios in question. In order to meet the needs of supporting choices between alternative renewable energy systems, three aspects were found to be essential for the modelling of the systems: 1) identification of the technologies, processes and systems that are influenced by the decisions the LCA aims to support, including identification of the marginal technologies and supplies on the markets affected by the decision, 2) definition of system boundaries and scope of the modelling, and 3) identification of the environmental impact of these systems and processes. In the CEESA project, the development of advances in LCA methodology and modelling has mainly focused on two sub-systems: - Crop/biomass production in Denmark and the consequences of changes in this. - Energy production in Denmark, especially electricity production. From the beginning of the project, it was acknowledged that the most significant environmental impacts related to crop/biomass based energy production do not derive from the biomass conversion technologies themselves but rather from the changes in crop production and land use supporting the biomass production system. Such changes include the direct environmental impacts of producing the energy crop (direct land use changes (dluc)) as well as market related responses to the change in import/export relations due to the replacement of food/feed crops by energy crops (indirect land use changes (iluc)). The identification of the involved marginal mineral fertiliser supplies is also of key importance to both dluc and iluc. These mechanisms are complex, and there was an absence of both methodology and data at the beginning of the project. Thus, one of the main focus areas of the methodology development and data provision within the LCA work package has been to improve both methodology and database. With respect to the LCA scenarios included in the CEESA project, it was necessary to evaluate and update existing energy technology data in order to properly model the future Danish energy systems suggested in the project. This was based on an extensive literature search and further implemented in the EnergyPLAN model. LCA and Energy System Analysis (ESA) tools have not been integrated into a single tool as part of the project. The primary reason for this was to maintain the flexibility of current LCA software (system definition, process setup, and inventory databases). Rather than 31

35 providing a simplified LCA tool to be integrated with ESA, it was chosen to further extend the LCA modelling using existing state-of-the-art LCA software (SimaPro) and base the LCA on modelling outputs from EnergyPLAN and Balmorel. This approach facilitated an integrated and coherent evaluation of the energy systems while at the same time allowing the use of the best available software for the modelling. 32

36 3 Modelling and Analyses As explained in the introduction and illustrated in Fig. 1.1, the work has taken its point of departure in state-of-the art energy system and LCA analyses of 100 % renewable energy systems. On this basis, work has been organised in different work packages on an inprocess basis and included in the development of tools and methodologies for coherent energy and environmental analyses as described in chapter 2 of this document. These tools have subsequently been applied to the analysis and further development of the above mentioned state-of-the-art scenarios leading to the results and scenarios documented in the report of work package 1, CEESA 100% Renewable Energy Scenarios towards 2050, which is summarised in the following. 3.1 Biomass resources and Conversion Technologies In the CEESA project, significant efforts have been put into identifying the biomass potential. Such a potential depends on the current use of land area and farming practices, but also on future land use options. The biomass potential for energy and transport purposes has been estimated on the basis of Danish agriculture and forestry for a range of scenarios assuming a business-as-usual scenario, conversion to organic farming, enacting dietary changes in the Danish population, or applying more extreme forest exploitation The latter will on the one hand contribute significantly to Danish exports, and on the other hand limit the option of bioenergy self-reliance. The results show that a substantial amount of land is currently allocated to meat production. There are several biomass feedstocks that could be used for energy purposes, but at the same time, these primary production systems must still supply food, feed, and materials. If biomass has to cover the production of materials, which are currently based on petro-chemical products, and self-sufficiency is the goal, significant changes would have to be imposed on the agricultural sector. In the CEESA project we have considered biomass resources from primary production as well as in the form of processing waste. Biomass resources from primary production As primary resources we consider dedicated energy crops, wood from forests, parks and gardens; and straw, stalks or leaves from agricultural crops. The resource potential is estimated as technical potential, i.e. resources that technically are available for use in society. From an economic point of view, individual resources may not be fully available. Straw from cereals make up the largest part of the resource potential of primary production. We estimate a decrease in the resource potential from 135 PJ yr -1 in 2000 to 129 PJ yr -1 in 2050 (Fig. 3.1) mainly due to an expected conversion of agricultural area to other uses, e.g. infrastructure, dwellings, industrial sites and recreational areas as forests or golf courses. 33

37 Biomass resource potential (PJ yr-1) Biomass from by-products and waste As secondary biomass resources or biomass in the form of by-products and waste, we consider manure from animal production, processing residues as mill residues, molasses, pulp, whey and wood residues Primary production Secondary production Year Figure 3.1: Biomass resource potential of primary and secondary production Resource availability No biomass resource is truly residual. Every biomass resource or fraction has a function in the ecosystem or in the economy. It cannot be removed from the ecosystem or the economy without inducing some changes and requiring some counter action if status quo is to be maintained. A consequence hereof is that using biomass resources for energy will to a stronger or weaker degree impose a conflict between the current use of a resource and a future use for energy services. Particularly resource conflicts may be induced if resources currently used for feed is diverted into energy uses. This will be the case if the technical potential of straw or food industry residues as whey, brewer s grain or molasses is to be realised. Other resources are more readily available as e.g. the part of straw production currently left in the fields or unutilised forest increment. However, more readily available does not mean without conflict. Straw left in the field will in most cases increase the carbon 34

38 content of the soil and unutilised forest increment contributes to a build-up of standing wood in Danish forests, which is a goal in current forest policy. Options of increasing biomass resources Several options exist to change and preferably increase the amount of biomass resource. The CEESA project has explored a range of options as described in this section. Organic farming Denmark is a farming country; app. 63 % of the land surface is allocated to agriculture. Organic farming has increased its proportion of agriculture. Statistics from The Food and Agriculture Organisation of the United Nations on organic farming only go back to 2004, but in % of the agricultural area or 147,000 ha was certified as or in conversion to organic farming. As compared to conventional farming in Denmark, organic farming is characterised by a lower proportion of cereals and a higher proportion of grass and clover in the crop rotation. Crop yields in organic farming are in general lower that in conventional farming. Estimates for winter and spring cereals are yields % of those achieved in conventional farming. Corresponding figures for rape seed is % and pulses %. Furthermore, organic livestock production requires some sort of bedding material. Assuming a complete conversion of Danish agriculture to organic farming, we find the straw potential to be zero. The biogas potential from animal manure is estimated to 6-16 PJ yr -1. In general, conversion to organic farming will substantially reduce the amount of biomass resources. 35

39 Biomass resource potential (PJ yr-1) Primary production Secondary production Year Figure 3.2: Biomass resource potential under the assumption that the entire agricultural sector in Denmark is converted to organic farming principles and is self-sufficient in feed. Dietary changes % of the Danish cereal production is used to feed animals for meat, dairy and egg production and % of the Danish grasslands in rotation are used to produce coarse fodder to feed ruminants. The demand for livestock products thus requires significant areas of agricultural land. However, Danish livestock production does not only supply Danish consumption. Domestic consumption corresponds to ~30 % of domestic production of meat, dairy products and eggs with substantial variation between different food stuffs. For pork, Danish consumption corresponds to 15 % of production. For eggs, the figure is 137 %. The food intake of an average Dane does not follow general dietary recommendations. The average diet contains too much meat and too little cereal products, fruits, vegetables and fish. Adjusting the Danish diet towards dietary recommendations would reduce the land area needed for agriculture. Assuming that land released from agriculture is used for dedicated energy crops as willow, we find an additional biomass resource potential of PJ yr -1. Assuming an even more drastic change in diet to a lacto-ovo vegetarian diet could increase the biomass resource potential by PJ yr

40 Biomass resource potential (PJ yr-1) Primary production Secondary production Year Figure 3.3: Biomass resource potential under the assumption that the entire Danish population adopts a diet recommended by Fødevareinstituttet (National Food Institute) containing less meat and more cereals, fruits, vegetables and sea food. Forest management practices A shift in forest management practices may increase the amount of biomass available for energy purposes through increased utilisation of biomass from early thinning and allocation of a larger part of harvested wood to energy purposes than to industry purposes. We find the potential of Danish forests to be 21.1 PJ in , 20.2 PJ in and 19.7 PJ in corresponding to an increase relative to the current potential of 16.7, 15.9 and 15.4 PJ yr -1 in , and , respectively. Forestry offers other options to increase energy production than changing the allocation of wood. Exotic tree species as Sitka spruce (Picea sitchensis), Douglas fir (Pseudotsuga menziesii), Grand fir (Abies grandis) and poplars (Populus sp.) exhibit higher growth rates than most native species such as e.g. beech (Fagus sylvatica) and oak (Quercus sp.). A general shift towards these high productive species could increase the biomass potential. Such a shift is, however, to some degree in conflict with current forest policies described in Det Nationale Skovprogram, which aim at increasing the coverage of native tree species. Different cereal cultivars Different wheat cultivars produce different amounts of straw. It has been shown for wheat that straw yields can be increased without compromising crop yields. We assume that straw 37

41 yields can be increased by 20 % and that this can be achieved for cereals in general. The straw potential can thus be increased by PJ yr -1. The global dimension Denmark is not the only country concerned with the supply horizon of fossil resources and their potential impact on the global climate. Many countries consider biomass as one of the pillars in a future non-fossil energy system. At the same time, the global population is expected to reach 9 billion around As a consequence, increasing competition on biomass resources is expected and concern over the resource potential is growing. Probably the most accessible biomass resource is residues from agricultural crops. The annual global production of crop residues is estimated to 4.2 Gton (dry weight). Of this amount, 3.5 Gton comes from only six crops; barley, maize, rice, soy bean, sugar cane and wheat. Agricultural intensification, i.e. mechanisation, improved nutrient management, improved seed sources and better plant protection, can increase crop as well as residue production of these six crops. It is estimated that global residue production can be increased by 1.2 Gton yr -1 (dry weight). The potential for increased production is geographically very dispersed. Particularly southern Asia exhibits a huge potential of more than 250 Mton yr -1 of additional residue production. 3.2 Renewable Energy in Transport Scenarios The research aim of this part of the project is to develop scenarios for renewable energy in the transport sector. The transport sector poses a significant problem in renewable energy systems since it has historically relied on liquid fuels (typically over 95% oil), the demand for transport is growing rapidly in recent decades, and the transport sector is characterised by a wide variety of modes and needs. It is therefore essential that the future transport system is assessed in detail so that it complements the needs of a 100% renewable energy system in Denmark. The methodology used in CEESA to assess the Danish transport sector is outlined in Figure 3.4, while the resulting scenarios are displayed in Figure 3.5. To begin, a 2010 reference model of the existing Danish transport system was created based on existing transport demands, transport-energy demands, and technologies. This data was collected for 26 different modes of transport and where adequate data was available, these characteristics were further subdivided by trip length and type. Once the 2010 reference model was complete, a reference scenario for the years 2020 and 2030 was developed based on forecasts from the Danish Infrastructure Commission (Infrastrukturkommissionen). A reference scenario was also projected for the year 2050 based on a number of business-asusual assumptions. Naturally, a significant amount of data was collected and a large number of calculations were required to make the 2010 reference model and the reference scenarios. Hence, a new spreadsheet Transport Energy Scenario Tool, which has been named TransportPLAN, was created during the CEESA project. Due to the wide range of data and outputs available in TransportPLAN, it can be used to assess a variety of different 38

42 transport scenarios, which are also displayed in Figure 3.4. In CEESA, these outputs were used as inputs to the energy system analysis tool, EnergyPLAN, so the implications of various transport scenarios on the complete energy system could be assessed (which is the research aim of Part 1 of the project). One key challenge encountered when developing the methodology was the definition of the transport boundary. In CEESA, the objective was to account for all transport demands associated with Denmark and hence the reference includes all passenger and freight demands, for both domestic and international transport. To do this, three distinct boundary conditions were defined and considered for each mode of transport assessed: national, transit, and international as displayed in Figure 3.6. In CEESA, 100% of the national transport demand and 100% of the Danish transit demand in other countries are included. The international transport demand was calculated by assuming that 50% of the demand was assigned to Denmark and 50% was assigned to the other country of origin. In this way, both countries share responsibility for the transport demand created between them. By using these boundary conditions for the transport sector, CEESA is not completely comparable to other publications. For example, the Energy Strategy 2050 report completed by the Danish Climate Commission did not include the international component of the transport demand and it did include the transit component of other counties in Denmark. As a result, the energy consumed by transport in 2050 is approximately 75 PJ (25%) higher in the CEESA reference than in the Danish Climate Commission s study. It should be noted that the principle of the boundary condition applied to both the energy and transport system is that, if all countries applied the same boundary condition, all consumptions would be accounted for and no elements would be counted twice. 39

44 1 Historical data was used to develop a detailed model of the Danish transport system. Statistics relating to transport demands, energy consumptions, capacities, and utilisation were collected for 26 modes of transport and then used to calibrate the TransportPLAN tool Reference Model 2 A business-as-usual reference scenario of the future transport system (demand and energy) was created based on forecasts from the Danish Infrastructure Commission until 2030 and on assumptions for The reference scenario represents a high increase in transport. demands. 3 Three new technology scenarios were created to assess how 100% renewable energy could meet the high increase reference transport demands. The conservative scenario uses known technologies and the ideal scenario assumes that technologies which are currently under development are available in the future. The recommendable scenario is a realistic and recommendable scenario based on a balanced assessment of realistic and achievable technology improvements. The key results indicated that these scenarios either use too much biomass (i.e. more than the biomass resource available in Denmark) or are over reliant on electrolysers (i.e. the energy system costs may become very high) to be considered realistic, even in the recommendable scenario. Hence, reductions in the transport demand are necessary to achieve a 100% renewable energy system in Denmark. To investigate this, new transport demand scenarios were also created in CEESA using the TransportPLAN tool. 2020, 2030, & 2050 High Increase Reference Scenarios New 100% RE Technology Scenarios Conservative Ideal Recommendable 4 The first alternative transport demand scenario created was the medium increase scenario. This accounted for a range of transport demand reduction measures, such as reducing the forecasted increase in demand, energy efficiency improvements, modal shifts, and new infrastructure. The technology scenarios were then examined under the new medium increase scenario. The results illustrate how the recommendable technology scenario in combination with the medium increase demand scenario will enable Denmark to achieve a 100% renewable transport sector, which consumes less than the potential biomass resource of Denmark. Finally, a no increase transport demand scenario was also analysed briefly to illustrate how the biomass consumed can be reduced even further by stabilising the transport demand at forecasted 2020 levels. Transport Demand Scenarios Medium Increase (Recommendable) No Increase (from 2020) Figure 3.5: Transport scenarios created during the CEESA project, including a brief description of the scenarios and their main findings. 41

45 Transit (0%) Denmark National 100% International (50%) Other Countries Transit (100%) Figure 3.6: Boundary conditions defined when calculating the energy consumed in the Danish transport sector. Once the reference was complete, the next step (see Figure 3.5) was to create a variety of 100% renewable energy scenarios which could satisfy the high increase transport demand forecasted in the reference (The term high increase defines this transport demand scenario since the reference forecasts a transport demand for 2050 which is double the current 2010 transport demand.) In total, three technology scenarios were designed which fit the following criteria: a conservative scenario is based on known technologies, an ideal scenario uses technologies which are currently under development, and a recommendable scenario is a realistic and recommendable scenario based on a balanced assessment of realistic and achievable technology improvements. To create these scenarios, the transport technologies needed to be assessed to establish what currently exists, what is in development, what is ideal, and what is realistic. To establish the current state of transport technologies, the various fuels required were compared in terms of 1) primary energy consumption of conversion technologies, 2) the land area required and 3) the costs of different technologies. This enabled prioritisation between different fuels for transport technologies. From this, it was clear that direct electrification is the most energy efficient form of transport and also that biofuel consumption is a key concern for future 100% renewable energy systems, primarily due to the land-area required to produce them. For example, many biofuels are already available on the market so they are well established, but the land area required to produce these fuels is very large. To put this in context, if all of the petrol, diesel, and jet fuel consumed in Denmark in 2010 was supplied using existing biofuels, then the land area required would be 5-6 times the total agricultural land area in Denmark. In contrast, wind turbines require hundreds of times less land area to produce the same energy as second generation biofuels which are expected to be developed. Hence, there is a trade-off here: biofuel technologies are already well established so they are suitable for the conservative scenario, but in an ideal world the transport sector would be electrified as much as possible which will typically require more expensive technologies. These key differences formed the basis for the three technology scenarios subsequently created in the CEESA project. 42

46 As part of this work package, a number of detailed, generic and transparent analyses of current state-of-the-art battery electric vehicles have been conducted under realistic conditions. Such analyses show that the present technology has challenges to overcome before it can meet the general expectations as presented in most literature. Consequently, it should be stressed that the present technology needs further development in order to be able to fulfil the preconditions behind the CEESA scenarios. For the conservative 100% renewable energy scenario, it was assumed that bio- DME/methanol would be used extensively in the transport sector. The only biofuel which would require less land-area than bio-dme/methanol is biogas. However, it was assumed that bio-dme/methanol will be easier to implement since commercial plants are already under construction and existing vehicles can be modified to use these fuels. Direct electrification was also used in this scenario, but in a conservative way: for example, in 2050, only 35% of private cars are electric even though over 95% of journeys are below 100 km and the range of commercially available electric vehicles today is approximately 160 km. After implementing these technological changes to the reference, it was clear that the conservative transport scenario will lead to a heavy dependence on biofuels: approximately 186 PJ of biofuel is necessary in 2050, but only around 60 PJ/year is available. Moving to 100% renewable energy using mainly existing technologies and under existing demand projections will therefore mean that Denmark is over dependent on biofuels. To assess the other extreme, none of the transport technologies considered in the ideal scenario consumed biofuels, but instead the entire transport sector was electrified. Naturally for many transport modes the potential for direct electrification is limited, especially for modes with a large proportion of long journeys such as trucks and aeroplanes. Hence, liquid fuels are still required in the ideal scenario, but instead of using biofuels to create them, coelectrolysers are used to created synthetic fuels such as syn-dme/methanol. This creates a new challenge: uncertainty. At present the ideal scenario seems unlikely due to the uncertainties surrounding the development of synthetic fuels, particularly in relation to the development of adequate co-electrolysers. For example, after discussing the future of synthetic fuels with various stakeholders, it became apparent that there is no consensus at present on how syn-jetfuel could even be created in the future. Therefore, since the ideal scenario would require 131 PJ of synthetic fuel in 2050, it is too risky to assume that the technical development, technical capability, and adequate costs will be reached to produce such large volumes of synthetic fuel. Hence, the recommendable scenario includes a mix from both the conservative and ideal scenarios. Once again, the main priority in the recommendable scenario is the direct electrification of the transport sector, with significant proportions of cars, vans, and rail directly electrified. Biofuels were then used to supply approximately half of the remaining liquid fuels, while half was supplied by synthetic fuels from co-electrolysers. However, even with this significant penetration of synthetic fuels, the biofuel demand of 78 PJ/year is still more than the biofuel resource of 60 PJ/year available in Denmark. Hence, to create a sustainable 100% renewable energy system in Denmark, the forecasted increase in the transport 43

47 demand will need to be reduced. To investigate this, a medium increase scenario was also developed in the CEESA project using the TransportPLAN tool (see Figure 3.5). To reduce the energy required in the transport sector, the following key changes were implemented in the medium increase scenario: 1. The high forecasted increase is reduced. In the reference scenario passenger transport is expected to increase by 80% between 2010 and 2050, while freight transport is expected to almost double. In the medium increase scenario, passenger transport increases by approximately 40% in 2050 compared to No major change in the demand for freight is included. 2. The efficiency of conventional cars is increased. Only the efficiency of cars is improved since there are already significant energy efficiency improvements in the reference for other vehicles: for example, if the efficiency gains for conventional vehicles in the reference were not included then the total energy demand for transport would be 427 PJ in 2050 and not the forecasted 285 PJ. 3. Vehicles are utilised more. In the reference model it was evident that the existing transport sector has very poor utilisation factors. For example, in the 2010 reference model national trucks only utilise approximately 42% of their capacity. In the medium increase scenario, utilisation factors were increased for different freight vehicles by approximately 5% of the original value. 4. Different modes of transport which are more efficient and use more sustainable fuels are utilised more in the medium scenario. For example, rail is a particularly suitable replacement for long road journeys since it is very efficient and it can be completely electrified. Therefore, the transport demand for electric rail was doubled in the medium scenario. To incorporate these measures into TransportPLAN, a number of modules were added to the tool including a model shift module, infrastructure cost calculator, and an energy efficiency improvement module. Afterwards, the three technology scenarios were then assessed using this medium increase transport demand scenario. As displayed in Figure 3.7, there is a reduction in the overall energy demand of approximately 85 PJ for the reference and 40 PJ for the recommendable scenarios, if the medium increase transport demand is implemented. Therefore, implementing the medium increase scenario is not just beneficial for a 100% renewable energy system, it is also beneficial for the reference transport system. In addition, if the medium increase scenario is implemented with the recommendable technology mix, then the biofuel consumption in 2050 is reduced to approximately 60 PJ/year, which is in line with the biofuels available in Denmark. However, the key issue which also needs to be addressed in relation to this dramatic transition for the transport sector is cost. 44

48 Reference Conservative Ideal Recommendable Reference Conservative Ideal Recommendable Energy Consumption (PJ/year) Electricity Train / bus Electricity Plug-in-hybrid Electricity BEV Syn-jetfuel Syn-DME/methanol Bio-jetfuel Bio-DME/methanol Bioethanol Biodiesel Jet-fuel fossil Diesel Petrol High Increase (Business-as-usual) Medium Increase (CEESA Proposal) Figure 3.7: Energy consumed by fuel type in 2050 for the reference, conservative, ideal, and recommendable scenarios for a high increase and a medium increase in the transport demand. To establish the costs relating to the transport sector, the entire energy system needs to be accounted for: in a 100% renewable energy system it is not only liquid fuel that is used extensively for transport, it is electricity also. Therefore, changes in the transport sector have implications for the electricity and heat sectors also. For example, even though the biofuel demand has been reduced to 60 PJ/year in the medium increase recommendable scenario, there may be an indirect increase in biomass for electricity production (which is investigated and discussed in work package 1). Here this is relevant since the costs associated with the variation in electricity demand can only be accounted for by modelling the entire energy system with and without the transport sector. Hence, these costs were calculated in conjunction with the energy system analysis in work package 1, which used the EnergyPLAN tool to model the complete energy system and the TransportPLAN tool to supply the transport inputs necessary (see Figure 3.5). The results, which are displayed in Figure 3.8 for each scenario in 2050, indicate that the medium increase demand is cheaper than the high increase demand for all scenarios. The high increase and low increase demand scenarios are, however, not directly comparable, as 45

49 the costs of having a medium increase instead of a high increase in passenger demand are not quantifiable in terms of the direct costs. If these measures are implemented, though, the savings amount to 20 billion DKK/year. It should be noted that the change also involves a significant expansion of the rail network. The market share of rail is expected to double until Figure 3.8 also indicates that the reference scenario is practically the same price as all of the 100% renewable energy scenarios for the medium increase in the transport demand. However, there is a clear distinction in the breakdown of the costs in the reference compared to the 100% renewable energy scenarios. In the reference, there are high fuel/energy costs which are caused by a high dependency on limited oil. In contrast, the 100% renewable energy scenarios have small fuel/energy costs, but higher investment costs since they use new and more efficient transport technologies. Hence, transforming to a 100% renewable energy transport sector will not require additional costs for society. Finally, since the medium increase recommendable scenario is relatively the same cost as the other medium increase scenarios, it makes sense to follow this pathway since there is a balanced consumption of biofuels and synthetic fuels from co-electrolysers. 46

50 Reference Conservative Ideal Recommendable Reference Conservative Ideal Recommendable Absolute Annual Transport System Costs (MDKK/year) 180, , , , ,000 80,000 60,000 40,000 20,000 0 High Increase (Business-as-usual) Medium Increase (CEESA Proposal) Fuel / Energy Vehicle Vehicle O&M EV Charging stations Renewal infrastructure road New infrastructure road Renewal infrastructure rail New infrastructure rail Other Figure 3.8: Transport system costs in 2050 for the reference, conservative, ideal, and recommendable scenarios for a high increase and a medium increase in the transport demand. To demonstrate how the recommendable scenario could evolve with time, Figure 3.9 illustrates the energy demands for the medium increase recommendable scenario from 2010 to It is clear from the results below that direct electrification and bio-dme/methanol should be introduced by 2020 to begin the transition to a 100% renewable transport sector. This enables DME/methanol vehicles to develop while co-electrolysers for synthetic fuels are also developing. As syn-dme/methanol production advances, it will also supplement the bio-dme/methanol as an additional liquid fuel and thus reduce the dependency on biofuels. Therefore, after 2030 the share of biofuel begins to stabilise considerably as more syn-dme/methanol is introduced into the energy system. The objective here is to ensure that the peak demand for biofuels in the transport sector does not surpass the residual biomass resources available to the Danish energy system. Figure 3.9 also indicates that there is an overall energy reduction of approximately 115 PJ/year between 2010 and

51 Energy Consumption (PJ/year) in the recommendable scenario, even though the transport demand is increasing (particularly for freight transport): this occurs since the vehicles used in the recommendable scenario are more efficient than those used in the 2010 reference. In comparison to the high increase (business-as-usual) reference scenario, there is also an overall energy saving of approximately 150 PJ (50%) in 2050 for the medium increase recommendable scenario, while both scenarios require the same costs (see Figure 3.8). Therefore, the Danish transport sector can be affordably transformed into a renewable and sustainable sector by 2050, by supporting more energy efficient transport technologies which are currently close to commercialisation and by reducing the high increase in the forecasted transport demand Reference (High increase) Recommendable (Medium Increase) Electricity Train / bus Electricity Plug-in-hybrid Electricity BEV Syn-jetfuel Syn-DME/methanol Bio-jetfuel Bio-DME/methanol Bioethanol Biodiesel Jet-fuel fossil Diesel Petrol Figure 3.9: Energy consumed by fuel type for the reference and recommendable scenarios between 2010 and 2050 for a high increase (business-as-usual) and medium increase (CEESA proposal) respectively in the transport demand. In the following section, the technology scenarios developed here are implemented with the medium increase transport demand into various 100% renewable energy systems using the EnergyPLAN tool. Subsequently, the energy-system-analysis results from work package 1 are presented and discussed. 3.3 Three Technology Scenarios reaching 100% Renewable Energy The aim of the CEESA scenarios is to design and thoroughly analyse the transition from the present energy system, which is primarily based on fossil fuels, to a 100% renewable energy system by the year However, such transition highly relies on the technologies which are assumed to be available within such time horizon and can have different effects 48

52 on the biomass consumption. To highlight such issues, the CEESA project has identified scenarios based on three different assumptions with regard to the available technologies. This methodology allows a better optimisation and understanding of the energy systems. The issue studied is 100% renewable energy systems for Denmark. In this context, the Danish society is the primary target group. The aim of this feasibility study is to enhance the knowledge of the technical challenges of such energy and transport systems and to analyse the economic and environmental consequences for society. It should be noted that the principle in the boundary condition applied to both the energy and transport system is that if all countries applied the same boundary condition, all consumptions would be accounted for, and no elements would be counted twice. The project goal regarding the construction of 100% renewable energy scenarios includes 7 elements: 1) Create a variety of 100% renewable energy system scenarios for Denmark. 2) Analyse and integrate the transport sector into such systems. 3) Analyse the effects of using biomass resources in 100% renewable energy systems considering the limitations in the biomass resources. 4) Use energy system analysis to integrate flexibility and smart energy systems solutions into the electricity, heating and transport sectors as well as into the fuel supply to gas grids which utilise renewable energy. 5) Analyse the effects on fuel efficiency and greenhouse gas emissions. 6) Analyse the transition towards such a system from today until ) Identify the socio-economic consequences of such scenarios, incl. job effects, commercial potentials, health effects and others. In order to enable a thorough analysis of the different key elements in 100% renewable energy systems, two very different 100% renewable energy scenarios as well as one recommendable scenario have been created: CEESA-2050 Conservative: The conservative scenario is created using mostly known technologies and technologies which are available today. This scenario assumes that the current market can develop and improve existing technologies. In this scenario, the costs of undeveloped renewable energy technologies are high. Very little effort is made to push the technological development of new renewable energy technologies in Denmark or at a global level. However, the scenario does include certain energy efficiency improvements of existing technologies, such as improved electricity efficiencies of power plants, more efficient cars, trucks and planes, and better wind turbines. Moreover, the scenario assumes further technological developments of electric cars, hybrid vehicles, and bio-dme/methanol production technology (including biomass gasification technology). CEESA-2050 Ideal: In the ideal scenario, technologies which are still in the development phase are included on a larger scale. The costs of 49

53 undeveloped renewable energy technologies are low, due to significant efforts to develop, demonstrate and create markets for new technologies. For example, the ideal scenario assumes that fuel cells are available for power plants, and biomass conversion technologies (such as gasification) are available for most biomass types and on different scales. Coelectrolysis is also developed and the transport sector moves further towards electrification compared to the conservative scenario. CEESA-2050: This scenario is a realistic and recommendable scenario based on a balanced assessment of realistic and achievable technology improvements. It is used to complete a number of more detailed analyses in the project, including the implementation strategy, as well as in a number of sensitivity analyses. Here, however, less coelectrolysis is used and a balance is implemented between bio- DME/methanol and syn-dme/methanol in the transport sector. This is the main CEESA scenario. Here Conservative and Ideal are used in the sense that different technological developments will have different effects on the extent of the use of biomass resources, as well as the requirements for flexibility and smart energy system solutions. In all scenarios, energy savings and direct electricity consumption are given a high priority. In the CEESA scenarios, the smart energy system integration is crucial. Electricity smart grids are only one part of this system. The scenarios rely on a holistic smart energy system including the use of: 1) Heat storages and district heating with CHP plants and large heat pumps. 2) New electricity demands from large heat pumps and electric vehicles as storage options. 3) Electrolysers and liquid fuel for the transport sector enabling storage as liquids. 4) The use of gas storage. Such smart energy systems enable a flexible and efficient integration of large amounts of fluctuating electricity production from wind turbines and photovoltaics. The gas grids and liquid fuels allow long-term storage, while the electric vehicles and heat pumps allow shorter term storage and flexibility. The transport sector poses two main problems in the transition to renewable energy: 1) The obvious easily accessible source, biomass, is limited and 2) the increase in the transport demands is historically high. The scenarios include a suggestion for a new transport system, with medium increase in demands (except goods) and more rail transport. To replace oil and keep the biomass consumption at a low level, the following strategy is applied: Focus is placed on maximising the use of electricity in the transport sector, and, where liquid fuels are needed, in some cars, vans, trucks and aviation, priority is given to DME/methanol. 50

54 With such fuels, conventional cars can be used in the short term (up to 3% blend), as bio- DME/Methanol is currently being commercialised based on waste products. With minor changes in vehicles, the share can be increased. In the scenarios, bio-dme/methanol is produced from a combination of gasified biomass and hydrogen from electrolysers and not from waste products. In the longer term, land use effects are lowered further by replacing bio-dme/methanol with syn-dme/methanol, which requires co-electrolysers and carbon sequestration. This strategy reduces biomass use and allows the integration of more wind turbines and photovoltaic into the energy system in general, i.e., the transport sector becomes an important part of the smart energy system. DME/methanol is used in the scenarios for the concrete calculations to illustrate the principle of using biomass resources in a combination with electrolysers to replace fossil fuels in the transport sector in the short term. In the longer term, carbon from other sources than biomass is used to replace larger amounts of fossil fuels without putting further strain on the biomass resource. Other types of fuels that fulfil this principle could also be relevant in the future, but the scenarios show that this principle can reduce the biomass consumption significantly. All the above three technology scenarios are designed in a way in which renewable energy sources, such as wind power and PV, have been prioritised, taking into account the technological development in the scenarios and the total costs of the system. Moreover, they are all based on decreases in the demand for electricity and heat as well as medium increases in transport demands. Consequently, none of the scenarios can be implemented without an active energy and transport policy. However, sensitivity analyses are conducted in terms of both a high energy demand scenario as well as the unsuccessful implementation of energy saving measures. These analyses point in the direction of higher costs, higher biomass consumption and/or a higher demand for more wind turbines. The important differences between the scenarios are highlighted in Table

55 Table 3.1, Main difference between the 100% renewable energy scenarios in CEESA. CEESA-2050 CEESA CEESA-2050 Conservative Ideal Renewable energy and conversion technologies Wind power 12,100 MW 16,340 MW 14,150 MW Photo Voltaic - 7,500 MW 5,000 MW Wave Power 1,000 MW 300 MW Small Combined Heat and Engines Small Fuel Cell Engines / Fuel Power CHP cells Large Combined Heat and Power and Power Plants Gas turbine Combined Cycle/ Combustion Large Fuel Cell Combined Cycle CHP/PP Gasification for electricity Yes partly Yes Yes and power production Transport Direct electricity 87% 23% 22% Bio-DME/Methanol 13% 0% 44% Syn-DME/Methanol - 77% 34% Bio-DME/Methanol plants Yes No Yes Electrolysers for Bio- DME/Methanol plants Co-Electrolysers for Syn- DME/Methanol plants Yes No Yes No Yes Yes Gas turbine Combined Cycle / Large Fuel Cell Combined Cycle CHP/PP In the conservative technology scenario, wave power, photo voltaic and fuel cell power plants are not included and emphasis is put on bio-dme/methanol and on direct electricity consumption in the transport sector. The electrolysers are based on known technology in this scenario. Smart energy systems and cross-sector system integration is required between the electricity system, district heating sectors as well as into the transport system and gas grid in all scenarios. The integration into the transport system and gas grids is, however, not as extensive in the conservative scenario as in the ideal scenario. In the ideal scenario, wave power, photo voltaic, fuel cell power plants, and a number of other technologies are used to their full potential, while, in the recommendable scenario, the technologies are assumed to be developed to a degree in which they can make a substantial contribution. For all technologies, sensitivity analyses are made in which they are replaced with existing technologies. The primary energy consumption for 2050 of the three scenarios and the reference energy system is compared in Fig Compared to the reference energy system, all the scenarios are able to reduce the primary energy supply to a level of approximately 500 PJ. There are, however, large differences between the structures of this primary energy supply, see Figure

56 PJ/year Primary energy consumption in CEESA scenarios for 2050 Unused electricity Wave power Wind power PV 700 Solar thermal Geo thermal Waste incineration Biogas, manure Straw, wood & energy crops (Solid for boilers, industry etc.) Wood, energy crops (gasified for Transport) Wood, energy crops (gasified for CHP) Natural gas 100 Oil 0 Reference 2050 CEESA 2050 Conservative CEESA 2050 Ideal CEESA 2050 Figure 3.10: Primary energy supply in the 2050 reference energy system and the three CEESA 100% renewable energy scenarios. In the conservative technology scenario, a 100% renewable energy system is possible with a total biomass consumption of 331 PJ. The ideal technology scenario can decrease this consumption to 206 PJ of biomass. In the CEESA 2050 recommendable scenario, the biomass consumption is 237 PJ and thus 30 PJ higher than in the ideal and 96 PJ lower than in the conservative scenario. In all three scenarios, hour-by-hour energy system analyses have been used to increase the amount of wind turbines to an amount ensuring that the Coal 53

57 PJ/year unused electricity consumption, also referred to as excess electricity, is lower than 0.5 TWh (1,8PJ). These analyses also ensure that the heat supply and gas supply is balanced. The importance of that is visible in the differences in the installed wind power capacities in the three 100% renewable energy scenarios, i.e., the ideal scenario is able to utilise more wind power than the conservative scenario. The ideal scenario uses the least biomass possible and requires a high degree of system integration and flexibility, while the conservative scenario uses the least possible biomass with a conservative assessment of the technological development. With more renewable energy sources and more efficient conversion technologies in combination with an integrated smart energy system, other sources of carbon can be integrated into the transport system, and hence reduce the overall consumption of biomass. In Figure 3.11, the biomass consumption is illustrated in the three scenarios. It is obvious that, although the overall primary energy supply can be reduced to 500 PJ in all scenarios, the technology choices in the 100% renewable energy system are crucial for the biomass consumption Biomass supply in CEESA scenarios Waste incineration (organic) 250 Biogas, manure Straw, wood & energy crops (Solid for boilers, industry etc.) 100 Wood, energy crops (gasified for Transport) 50 0 CEESA 2050 Conservative CEESA 2050 Ideal CEESA 2050 Wood, energy crops (gasified for CHP) Figure 3.11: Biomass supply in the three CEESA 100% renewable energy scenarios. The results of CEESA show that, in a business-as-usual scenario, the biomass potential is approx. 180 PJ/year. A shift in forest management practices and cereal cultivars could 54

58 increase the potential further to approximately 240 PJ/year by The 180 PJ/year could also be increased to 200 PJ by enacting dietary changes. Such potential represents the use of residual resources only. This means that the CEESA 2050 recommendable scenario is kept within the boundaries of residual resources, and the CEESA 2050 conservative scenario illustrates that an active energy and transport policy is required to stay within these limits. It should be noted that a target of 240 PJ/year by 2050 implies a number of potential conflicts due to many different demands and expectations of ecosystem services, as this requires the conversion of agricultural land otherwise allocated to food crop production to energy crop production, potentially reducing food and feed production. All crop residues must be harvested, potentially reducing the carbon pool in soils. A way to reduce this conflict potential is to reduce the demand for biomass for energy or to further develop agriculture and forestry in order to increase the biomass production per unit of land. If biomass in a future non-fossil society has to cover the production of materials currently based on petro-chemical products, even more pressure will be put on the biomass sector. In order to meet such demands, PJ would have to be allocated to that purpose. In this respect, it should be noted that, in addition to the 240 PJ of residual biomass resources, waste resources are also available amounting to PJ or a total of approximately 280 PJ. In this respect, CEESA 2050 recommendable and ideal would enable the allocation of biomass resources to the materials currently based on petro-chemical products. In a sensitivity analysis, the CEESA 2050 ideal scenario has been taken to a further extreme, showing that, in principle, 180 PJ is possible; however, this comes at an additional cost which is elaborated below. 100% Renewable Energy and Large Reductions in fuel consumption The current primary energy supply in Denmark (fuel consumption and renewable energy production of electricity and heat for households, transport and industry) is approximately 850 PJ, taking into account the boundary conditions applied to transport in this study, in which all transport is accounted for, i.e., national/international demands and both passengers and freight. If new initiatives are not taken, the energy consumption is expected to decrease marginally until 2020, but then increase gradually until 2050 to about 970 PJ. The reference energy systems follow the projections from the Danish Energy Authority from 2010 until 2030, and the same methodology has then been applied here to create a 2050 reference energy system. The measures of savings, transport as well as renewable energy and system integration between the electricity, heat, transport and gas sectors can reduce the primary energy supply to 669 PJ in CEESA 2020; 564 PJ in CEESA 2030; 519 PJ in 2040, and 473 PJ in CEESA 2050, respectively. At the same time, the share of renewable energy from wind turbines, photovoltaic, solar thermal, and wave energy, as well as biomass will be increased. The share of renewable energy in the recommended energy system increases from about 20 % in 2010 to 42 % in 2020 and to about 65 % in If the oil and gas consumption in refineries and for the extraction of oil in the North Sea is excluded, 73 % is the share of renewable energy in the 2030 energy system. In 2050, the entire Danish energy system (incl. transport) is based on 55

59 PJ/year 100 % renewable energy. The primary energy supply is illustrated in Figure The energy flows in the CEESA 2050 recommendable 100% energy system are illustrated in a sankey diagram in Figure Primary energy consumption in CEESA Reference CEESA Coal Oil Natural gas Biomass (gasified) Biomass (solid) Biogas, manure Waste incineration Geo thermal Solar thermal PV Wind power Wave power Unused electricity Figure 3.12, Primary Energy Supply in CEESA. The energy system in CEESA 2020 is based on measures which can be realised with the current technology; however, some development of battery electric vehicles, hybrid electric and plug-in hybrid electric vehicles is assumed. The main focus in the short term is large 56

60 heat pumps and heat storages in the district heating sector. In CEESA 2030, large parts of the transport system are changed, district heating systems are heavily expanded, the efficiency of power plants is increased, more mature and new renewable energy technologies are introduced, and further energy savings are implemented in electricity and heating as well as in the transport sector through the introduction of modal shift measures and going from a high increase to a medium increase in transport demand. In general, large parts of the fossil fuel consumption are replaced by electricity demands, especially within transport, with different types of electric vehicles and electrically powered trains. Special emphasis has been put on the transport sector in which the transition to renewable energy poses significant challenges due to the very high demand increases which are forecasted and an almost 100 % dependency on oil. Figure 3.13, Sankey diagram of the CEESA % renewable energy scenario. 57

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